State Awards Nearly $50 Million to 17 Hospitals To Improve Efficiency, Lower Costs

ALBANY, N.Y. (Sept.2, 2010) - New York State is awarding $49.9 million in grants to 17 hospitals in the state that have incurred operating losses as a result of changes in the payment system for Medicaid, the Federal-State health insurance program for low-income adults and children.

The award is being made by the State Department of Health (DOH) and the Dormitory Authority of the State of New York (DASNY), which jointly administer funding under the Healthcare Efficiency and Affordability Law for New Yorkers – HEAL NY. The awards are the latest in a series of funding initiatives available under HEAL NY and the Federal-State Health Reform Partnership (F-SHRP) to support restructuring projects that improve the efficiency and affordability of health care.

The awards will fund capital projects to assist hospitals in undertaking construction activities and renovations that will reduce excess beds and inpatient services in favor of lower-cost outpatient care more appropriate to patients' needs. The efficiencies and revenues associated with more streamlined services will aid hospitals in their transition to the new Medicaid rate structure.

A grant to St. Joseph's Hospital in Elmira, for example, will support the renovation and consolidation of outpatient areas, which will reduce waiting times and increase outpatient treatments. Awards to Wyckoff Heights Medical Center in Brooklyn and Brookhaven Memorial Hospital Medical Center in Patchogue will support the opening of primary care clinics in the communities served by those facilities. A grant to Columbia Memorial Hospital in Hudson will help establish an urgent care center in the community and reduce costly overreliance on the hospital's emergency room.

"We recognize the need to provide additional assistance to hospitals that serve large numbers of Medicaid clients as these facilities adjust to the new Medicaid rate structure," said State Health Commissioner Richard F. Daines, M. D. "The funded projects will result in better health care for our citizens and lower costs to taxpayers."

Paul T. Williams, Jr., DASNY President, said, "DASNY looks forward to working with the Department of Health to facilitate needed funding for hospitals which provide a vital service to their communities. Changes in Medicaid reimbursements have created financial pressures on these institutions, and these grants were specifically created to assist these institutions restructure their operations to meet those pressures."

Projects are funded for a period of two years and are expected to commence in October 2010. Grant recipients and their awards follow.